On Thursday, Nifty finally broke down, one week after the Hanging Man pattern was formed on Daily Charts and pointed here in Nifty View. It still managed to hold on to the Low of Hanging man, which will give some hope to the Bulls. This cooling off/ correction was much needed, and now, it remains to be seen whether Nifty consolidates here, to build a base for another upside move, or whether a deeper correction sets in. The first sign of a deeper correction will come if and when Nifty breaks below 5815/5790 and 5770 levels. Till then, the market remains Sell on Rises for intraday traders, while Positional traders can hold their Short Positions with Stoploss around 5915 Nifty Spot on closing basis.
The Nifty Option OI Charts are given below:
On the Nifty Options front, not much Open Interest activity was seen by both the Bulls and the Bears. The Bears added 14 lacs+ Open Interest in Nifty Options of 5900 CE to 6100 CE Strike. The Bulls were absent today and did very little addition. Overall, the Open Interest at 6000 CE strike has moved to a Huge Level of 1.15 Crore+. Although a Bearish sign, this also gives a signal that if the Bulls somehow to manage to capture this level, we can see a huge Short Covering rally from the Bears. Going forward, some profit booking is expected at 6000 CE Strike. Apart from that, 5900 remains as the 50:50 level, while 5800 is the immediate support level for Nifty, with Open Interest at 5800 PE at 80 lacs+.
For Friday immediate resistance for Nifty Spot comes at 5870 and 5890/5905 levels. On any upside, Selling Pressure is expected at each of these levels, and can be used by traders to build Short Positions. Above 5905, the Bulls are expected to dominate, and Shorts should not be tried by intraday traders. On the downside, support for Nifty Spot comes at 5850/5840 levels. Staying below this, the Bearish momentum will continue, and Nifty can slide lower towards 5825/5815 levels, where it has found support earlier. Below these levels, 5790/5770 are the levels to watch out for. Any breach of these levels will be the first sign of a deeper correction setting in in Nifty.
14 Dec - Nifty Spot resistance at 5870-5890-5905-5930. Support at 5840-5820-5790-5770 - www.niftypower.com
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